A pioneering investment model behind some of the world’s fastest growing companies is being launched in Aberdeen to accelerate the energy transition.
More than 15 unicorn businesses with billion-dollar values have been created by American venture studios, a unique business model which wraps senior executive talent and investment around some of the country’s most promising companies.
Now two of Scotland’s leading technology entrepreneurs – Steve Gray and Stuart McLeod – are seeking to replicate that success in Scotland with the launch of Ventex, a venture studio focussed on climate tech.
Ventex will run a global portfolio from Aberdeen and will primarily focus on repurposing companies, technologies, skills and experience in the existing supply chain to support the transition to net zero.
It will also invest in early-stage companies with technologies which have significant potential to help solve the climate crisis. Other venture studio success stories include Moderna, the company behind the Covid vaccines.
The studio has already completed its first two investments, Aberdeen-based High Performance Robotics (HPR) and decommissioning-focussed artificial intelligence firm Rahd ai, which is headquartered in Perth, Australia.
HPR is now applying expertise from inspecting oil and gas assets to delivering cost-efficient inspection services to the offshore wind market, while Rahd ai is poised to dramatically reduce decommissioning costs for the removal of oil and gas infrastructure.
Ventex managing partners Steve Gray and Stuart McLeod have a track record of success and have both built global businesses in the past.
Steve Gray was the founder and former chief executive of ROVOP, which he grew to become the largest independent operator of Remotely Operated Vehicles (ROVs) globally, employing over 250 people.
Stuart McLeod is a serial entrepreneur and has enjoyed similar business success, most notably leading oil and gas completions and technology specialist Qedi through to its £33million acquisition by Amec plc in 2011.
They now see an opportunity in the UK energy sector, where the political environment has made it challenging for oil and gas supply chain companies to access the capital they need to invest in the skills and technology needed to serve new clients in renewable energy.
They believe that by “refounding and repurposing” high potential businesses, Ventex can unlock significant value and help anchor renewable energy jobs in communities that already have most of the skills and infrastructure to drive a faster transition.
Stuart McLeod said: “Scaling repurposed solutions at the pace required by the climate emergency enables Ventex to unlock value in the new industrial revolution. Rather than relying solely on start-ups, which burn cash and have higher barriers to entry to build trust and credibility, we will leverage the track record of proven concepts.
“The valuation multiples for many energy service companies have hit an all-time low due to the current political environment in the UK. By opening up renewable energy opportunities for our portfolio, Ventex secures a dramatic upgrading of their valuation multiples, unlocking long-term value, enabling access to growth capital and rerating the economic trajectory of entire communities.”
Traditional venture studios focus on investing in high-growth start-up companies. Ventex is disrupting this model by targeting mature businesses with high transition potential, through which they deploy technology faster.
Steve Gray said: “A generation of oil and gas service companies have been left in a decade long permafrost. This began with the downturn in 2014, followed by Covid just as recovery had begun, and then the current political environment. This has starved companies of the capital, skills and courage they need to take advantage of the transition.
“The energy transition and journey to net zero represent the largest industrial and investment opportunity globally, but investment is held back by a dichotomy; a toxic political environment around oil and gas on the one hand, and the difficult financial metrics around renewables on the other.
“By underpinning a validated venture studio playbook, or growth strategy, with the track record of delivery, cashflow, and customers of a mature business, we solve that dichotomy.”
Ventex is currently finalising its leadership board and will be announcing further investments in the coming weeks.
Click here to read more about the studio via its website.
